A Look At Investigator Silver’s Valuation After Paris Project Feasibility And Maiden Ore Reserve Milestones
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Follow on equity offering reframes funding for the Paris Silver Project
Investigator Silver (ASX:IVR) has filed a A$55 million follow on equity offering, giving investors a fresh look at how the company plans to fund its 100% owned Paris Silver Project in South Australia.
See our latest analysis for Investigator Silver.
After gaining attention with a maiden ore reserve and definitive feasibility study for Paris, Investigator Silver's 1 year total shareholder return of 313.04% contrasts with a year to date share price return of a 38.71% decline, suggesting earlier optimism has cooled despite a 30.14% 90 day share price return.
If this funding update has you looking across the silver space, it could be a good moment to scan our list of 7 top silver producer stocks for other potential opportunities.
With the A$55 million raise priced at a small discount to the last close and a very large 1 year total return already on the board, you have to ask yourself: is Investigator Silver still mispriced, or is the market already baking in Paris growth?
Most Popular Narrative: 94.7% Undervalued
At a last close of A$0.095 against a narrative fair value of A$1.80, there is a wide gap between what the market is paying and what the leading narrative suggests, and that difference is built on some very bold silver price assumptions.
To estimate Investigator Resources' stock price if silver hits $100 per ounce, let's consider the following factors based on the data provided:
Key Inputs:
• Annual silver production: 4 million ounces per year.
• AISC (All-In Sustaining Cost): $13 per ounce.
• Silver price assumption: $100 per ounce.Free Cash Flow (FCF) Estimate:
1. Revenue at $100 silver:
[ ext{Revenue} = 4,000,000 \\, ext{oz} imes 100 \\, ext{USD/oz} = 400,000,000 \\, ext{USD/year} ]2. Operating costs:
[ ext{Operating Costs} = 4,000,000 \\, ext{oz} imes 13 \\, ext{USD/oz} = 52,000,000 \\, ext{USD/year} ]3. Free Cash Flow (FCF):
[ ext{FCF} = ext{Revenue} - ext{Operating Costs} = 400,000,000 - 52,000,000 = 348,000,000 \\, ext{USD/year} ]Valuation Multiple:
Assuming a conservative 10x FCF multiple, the total market capitalization could be:
[ ext{Market Cap} = 348,000,000 imes 10 = 3.48 \\, ext{billion USD}]
This narrative, put forward by RockeTeller, leans heavily on high future production, tight cost control and a rich free cash flow multiple to reach that A$1.80 figure. Want to see exactly how those production and pricing assumptions line up against the current A$55 million equity raise and today's A$0.095 share price? The full narrative breaks down the numbers that sit behind that very large implied upside.
Result: Fair Value of A$1.80 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, that story could be knocked off course by lower realised silver prices, or if actual production, costs and dilution differ meaningfully from the narrative playbook.
Find out about the key risks to this Investigator Silver narrative.
Next Steps
With that mix of excitement and caution in mind, it makes sense to look at the data yourself and move quickly to shape your own view, starting with the 1 key reward and 4 important warning signs.
Looking for more investment ideas?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include IVR.AX .
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